Milestone Scientific heads into its Q1 results already on the back foot — short sellers spent weeks piling in, then scrambled out just as the company delivered a sales miss.
The short-selling story here is the most compelling part of the setup, and its reversal is dramatic. Short interest rocketed from under 100,000 shares in mid-April to a peak of roughly 5.5 million shares around April 17 — briefly touching near the 52-week high on the borrow availability gauge — before collapsing nearly 59% in a single week to 1.2% of the free float. Borrowing costs, which had spiked as high as 5.15% in late April, eased back to 1.83%. The unwind left the borrow market notably looser: availability is well above the tightest levels of recent weeks, and the ORTEX short score has fallen from above 50 to 43.5, signalling the intensity of the short-side pressure has meaningfully receded.
What makes the timing notable is that the squeeze-and-unwind played out right before the print mattered. Milestone's Q1 numbers landed after the close on May 13: EPS of -$0.01 was in line with estimates, but revenue of $2.16 million fell short of the $2.25 million consensus. That top-line miss matters for a company of this size, where every incremental dollar of adoption for its CompuFlo medical device platform carries outsized weight. Management expanded the CompuFlo Advisor Program and highlighted growing national clinical adoption earlier in the month — the bull case rests on whether that commercial momentum translates into accelerating sales. The bear case is straightforward: at $0.35 per share with the stock down 13% on the week heading into the print, the company is burning cash and the sole sell-side voice — Benchmark's Speculative Buy with a $1.00 target (lowered from $1.25 in November 2025) — represents stale conviction rather than fresh enthusiasm.
One wrinkle in the options market deserves attention. The put/call ratio jumped to 0.058 on May 13, more than three standard deviations above its 20-day average — and the highest reading in the past 52 weeks. For a stock where puts are almost never traded, even a small increase in put volume registers as an extreme z-score. It is a thin signal, but it points to at least some hedging activity emerging around the print, which is unusual for MLSS.
The earnings report will test whether the CompuFlo commercial expansion story can produce enough top-line growth to justify re-engagement after the short-selling surge and retreat — or whether the revenue miss confirms the caution that short sellers had been pricing in during April.
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